Oil prices rise amid Gulf of Mexico storm, Middle East tensions

Marco Green
July 12, 2019

Futures in Original York had been diminutive changed after settling above US$60 a barrel on Wednesday for the principle time since Might.

"Powell cited trade uncertainties that surround economic growth as a potential reason to cut interest rates".

Supply disruption and concerns over crude flows disruptions are keeping the price of oil elevated.

Still, U.S. output is rising again after a brief drop from record levels, according to the EIA. Asian stocks opened higher and the dollar fell following Powell's comments.

U.S. West Texas Intermediate (WTI) crude futures were up 32 cents, or 0.5%, at $60.75 a barrel, having earlier touched their highest since May 23 at $60.83.

Oil has been rallying in the past week, with Iranian tensions escalating after the British navy intervened to stop the country from blocking an oil tanker leaving the Persian Gulf. The contract closed on the ideal stage since Might 22 on Wednesday.

Yet OPEC on Thursday also released a weak market outlook for 2020, saying the surge in US shale threatens to produce another supply surplus next year.

The worldwide benchmark Brent crude for September delivery gained 2.85 dollars, or 4.4 percent, to close at 67.01 dollars a barrel on the London ICE Futures Exchange, the highest finish since May 29. It climbed 4.4% to $67.01 on Wednesday, the highest close since May 29. The global benchmark crude traded at a US$6.47 premium to WTI for the same month.

And fears of storm damage to oil installations in the Gulf of Mexico along with Britain's unexpected emergence as Iran's new enemy in the Tehran's sanctions drama briefly drove crude prices to seven-week highs Thursday before the market paused for a breather. Chevron said Tuesday it began closing five of its platforms and will start moving out all associated personnel. Royal Dutch Shell Plc and BP have also evacuated workers.

Data from the American Petroleum Institute (API) on Tuesday showed USA crude inventories fell by 8.1 million barrels in the week to July 5 to 461.4 million, compared with analyst expectations for a decrease of 3.1 million barrels.

The situation in the Middle East remained tense.

Five boats believed to belong to Iranian Revolutionary Guards approached a British oil tanker on Wednesday and asked it to stop in Iranian waters close by, but withdrew after a British warship warned them over radio, a US defence official said on Thursday. That came after Iran's military vowed to retaliate against the U.K.'s seizure of a tanker loaded with Iran's crude off the coast of Gibraltar last week.

Other reports by Click Lancashire

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